Music Magpie concentrates on margins and rental to grow profits
Stockport-based recycling retailer musicMagpie, has said trading strengthened from February driving pre-tax (EBITDA) profits of £2.0m, up 42% on the same half last year.
The recovery comes amidst postal strikes and low consumer confidence impacting December and January’s numbers, but cost control and increasing gross margins rather than growing revenues on lower margin products has paid off.
Consumer Technology revenue for H1 2023 was £41.2m, comprising two thirds of total revenue (H1 2022: £46.0m). Sales of Disc Media and Books continued their anticipated decline, falling to £20.8m (H1 2022: £25.3m).
Steve Oliver, Chief Executive Officer & Co-Founder of musicMagpie, said: “We are pleased with our performance in what is always the seasonally quieter half of the year for musicMagpie. It is especially gratifying to see that our profit improvement has been driven by an increased margin. This has been achieved both by focusing on higher margin sales through our own musicMagpie online store, as well as the continued strong growth of our rental offering. While we remain very mindful of the current tough consumer environment, the momentum in our business as we head into H2 means that we are confident of achieving our full year expectations.”
The company will announce its interim results for the six months ended 31 May 2023 on Thursday 13 July 2023.
Music Magpie has also extended its £30.0m Revolving Credit Facility by one year to provide committed facilities through to July 2026. Net debt on 31 May 2023 was £13.7m.
As evidenced in previous years, the Group has a much stronger second half weighting to its financial year, owing in part to seasonal peak trading around the Black Friday weekend in November. This seasonality, combined with the continued focus on own store sales and the strong performance achieved in Q2 2023, means that the Board is confident in the Group achieving its full year expectations, whilst remaining cognisant of the current tough consumer market.
